Mainlining classical economic theory

This is an astonishingly excellent text which understands a great deal but misses the most important part. This is the text: Applied Mainline Economics: Bridging the Gap between Theory and Public Policy by Matthew D. Mitchell and Peter Boettke. And there we find (pp. 2-3):

And though mainline concepts are constantly evolving, they draw their inspiration from, and are intimately connected with the enduring lessons of early economic thinkers. A line connects the contemporary variants of these ideas to insightes of Thomas Aquinas of the 13th century; the Scottish Enlightenment thinkers, such as Adam Smith of the 18th century; and the Neoclassical school of the early 20th century. Thinkers in the last few decades have extended this line of inquiry, including Nobel laureates F.A Hayek, James Buchanan, Ronald Coase, Douglass North, Vernon Smith, and Elinor Ostrom.

Let’s see who’s included:

  • Thomas Aquinas of the 13th century;
  • the Scottish Enlightenment thinkers, such as Adam Smith of the 18th century;
  • the Neoclassical school of the early 20th century
  • thinkers in the last few decades, including F.A Hayek, James Buchanan, Ronald Coase, Douglass North, Vernon Smith, and Elinor Ostrom

Now let’s see who is missing? Who is missing in particular is the Classical School of the mid-19th century and especially John Stuart Mill.

And then there is a list of characteristics that have been suggested over the years that breed strong economies which include everything discussed by Mill and the his contemporary classical economists:

  • specialisation and the division of labour
  • institutional structures
  • natural endowments
  • geographical advantages
  • capital accumulation and growth
  • cultural inheritance
  • personal traits such as attitudes to thrift and hard work
  • technological sensibilities
  • individual liberty
  • social attitudes to commercial activity

And yet it is Mill and the Classical School whose perspective is the perspective most congruous with these characteristics which is nevertheless left out. And you know why that is? Because no one has any idea what they said. There is a gap between Ricardo, who died in 1821 and the coming of the Marginal Revolution in 1870 that is almost entirely unknown to economists today.

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